Cannabis Legalized with Strict Advertising and Packaging Rules

Cannabis will be a legal product in Canada on October 17, 2018, albeit with rigorous regulatory restrictions, including highly restrictive packaging and advertising rules. This comes after significant dialogue between the House of Commons and the Senate, and almost three years after the Government of Canada announced that it would legalize and regulate access to cannabis. The federal legislation received Royal Assent on June 21, 2018.

Once in force, individuals eighteen years or older may legally possess up to thirty grams of cannabis and grow up to four cannabis plants in their private residence – although most provinces have increased this age to nineteen and some are pushing back against the allowance for home-grown plants. Permitted forms include dried, fresh and oils, with edibles likely added in a year. Cannabis accessories and services will also be regulated. Until October 17, cannabis will remain a regulated narcotic, and those who advertise, possess or sell cannabis will continue to be subject to criminal penalties (with some exceptions for medical use).

Branding, packaging and advertising will be severely restricted under the new regime, incorporating similar restrictions applicable to tobacco, prescription drugs and alcohol products. The proposed regulations require that every product label include a standardized cannabis symbol with a specified size, appearance, and placement. Mandatory health warning messages and THC content are also required on packaging. Images or graphics besides the brand name and logo are prohibited, as are coatings, embossing, cut-outs and peel-aways. Furthermore, packaging must be plain, with a background of uniform colour that cannot be metallic or fluorescent.

Promotion of cannabis and related accessories and services cannot appeal to young people or present brand elements in a way that evokes “glamour, recreation, excitement, vitality, risk or daring.” Further, celebrity endorsements and sponsorship of buildings, activities and events will be prohibited. Branded merchandise will be allowed, narrowly escaping the Senate’s attempt to excise this exemption. These advertising requirements are federal, but provinces are free to implement stricter minimum regulations (and some have already).

Canadian provinces and territories also have jurisdiction to license cannabis and regulate its distribution and sale. As with alcohol, the provinces have put forward different distribution models. All activities will be licensed, but certain provinces have elected to establish government-owned monopolies to sell cannabis, while others will allow private retailers into the market. Recreational consumption restrictions will also vary by province, with many provinces electing to prohibit public consumption.

Cannabis products sold for medical purposes will be required to abide by the new packaging and labelling regulations. Producers of medicinal products will have until April 17, 2019 to comply with the new laws.

Licensed producers and distributors of legal cannabis and accessories will have to carefully monitor compliance to avoid harsh penalties. The maximum penalty for an offence related to promotion, packaging and labelling is $5,000,000 and imprisonment for up to three years. Corporate directors and officers who are found to be party to an offence may be found personally liable and subject to the same penalties.

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